Bran Stark has asked Sansa Stark to exchange Pyke Castle (owned by the 6 kingdoms) for some land south of the Wall owned by the Starks. The 6 Kingdoms have a basis in Pyke Castle of $2,000,000, where the FMV of the Castle is $2,500,000. The FMV of the land south of the Wall is $3,000,000 and the Starks have a basis of $1,000,000. Sansa has agreed to the transaction but really wants to understand the tax consequences. All tax rates will be at the individual rates for both ordinary and capital gains income. Please advise on the most tax efficient and the most tax inefficient manner to make a swap of the two pieces of real property.
